Northumbrian Water taps out

2nd Aug 2011 08:48

Another British utility company is set to fall into foreign hands, after Northumbrian Water agreed to a takeover bid by Hong Kong billionaire Li Ka-shing.UK Water (2011), a company formed by Cheung Kong Infrastructure Holdings (CKI), Cheung Kong (Holdings) Limited and Li Ka Shing Foundation Limited, is to pay 465p per Northumbrian share in a deal that values the water company at around £2.41bn. The offer price is bang on the level of the indicative offer CKI announced on 11 July.Northumbrian shareholders will also get to keep the recently announced final dividend of 9.57p.Shares in Northumbrian rose 18.8p to 468.2p on the announcement of the agreed bid. "The offer represents an attractive premium to both the regulated capital value of Northumbrian Water Limited and the company's share price before recent speculation began," said Sir Derek Wanless, chairman of Northumbrian.The Ontario Teachers' Pension Plan Board, which has a beneficial holding of Northumbrian Shares representing around 26.8% of Northumbrian's existing issued share capital, has irrevocably undertaken to vote in favour of the scheme of arrangement that will be used to effect the takeover. It has also undertaken not to bid, or participate in any bid, for Northumbrian.Along with other commitments it has received, UK Water is assured of acceptance of its bid from shareholders representing just over one-third of the share capital of Northumbrian Water."Through our experience with CKI's other businesses in the UK -including UK Power Networks in London, Eastern England and South East England; Seabank Power in Bristol; and Northern Gas Networks in Northern England - we appreciate the critical importance of Northumbrian's business to the communities it serves," said HL Kam, group managing director of Cheung Kong Infrastructure.--jh